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Royal Bank of Scotland (RBS) has agreed a settlement with US authorities for its role in rigging benchmark foreign exchange rates.

In proposed settlements with the US Department of Justice and the Federal Reserve, RBS has agreed to enter a guilty plea that it “knowingly, through one of its euro/U.S. dollar currency traders, joined and participated in a conspiracy to eliminate competition” in purchase and sale agreements in the FX spot market in the United States and elsewhere.

The plea accepts the “conspiracy continued from as early as December 2007 to at least January 2013” and RBS participated “from as early as December 2007 until at least April 2010”.

RBS has agreed to pay a $395 million (£254 million) fine to the US Department of Justice and a $274 million (£176.2 million) fine to the Federal Reserve.

The 80 per cent state-owned bank said as previously disclosed, it remains in discussions with governmental and regulatory authorities in other jurisdictions in relation to conduct within its FX business.

RBS was one of four banks to reach a settlement, along with Barclays, JP Morgan Chase and Citigroup, who have been fined a combined total of $5.7 billion (£3.66 billion) for their role in manipulating foreign exchange rates.

Barclays will pay $650 million (£418 million) in criminal penalties to the US Department of Justice, and a further $1.3 billion (£836 million) to settle claims the New York Department of Financial Services, the US Commodity Futures Trading Commission and the UK regulator the Financial Conduct Authority.

RBS said in a statement on the proposed settlement, RBS and RBS Securities Inc have also entered into a cease and desist order with the Federal Reserve in how it conducts and operates its FX activities, and has undertaken to “submit enhanced plans, acceptable to the Federal Reserve, to comply with applicable U.S. laws and regulations with respect to these activities and certain of the market activities conducted within its Corporate and Institutional Banking division”.

In addition, RBS and RBS Securities Inc have also reached an agreement to settle an anti-trust class-action lawsuit raised by plaintiffs who entered into FX transactions with RBS or other defendant banks.

RBS said that agreement is subject to execution of a final settlement agreement and approval of the federal court in New York, which is presiding over the matter.

The bank said the fines and settlement and the consolidated antitrust class action litigation, “are fully covered by existing provisions”.

RBS chief executive Ross McEwan said the “serious misconduct” the bank has offered a plea deal for, “has no place in the bank that I am building”.

“Pleading guilty for such wrongdoing is another stark reminder of how badly this bank lost its way and how important it is for us to regain trust, he said.

“To regain that trust we are putting the interests of our customers at the heart of this business and its culture.

“It has taken far longer than anyone hoped to root out all the past conduct problems and practices and as a result we still have significant challenges on the horizon.

“We are determined to learn the lessons from our past mistakes and to hold those responsible fully to account for their actions.”

RBS said it “provided its full cooperation to regulators throughout the process” and its management has since “taken action to significantly improve culture, systems and controls”.

To date the bank has dismissed three employees linked to the FX rigging scandal and a further two are suspended pending further investigation.

Barclays has agreed to fire eight staff linked to rigging FX rates as part of its plea deal.

The bank said the plea and settlement will also be taken into consideration by the group Performance and Remuneration Committee and senior management “in relation to future remuneration decisions”.

RBS chairman Sir Philip Hampton, who will leave the bank in September to take on a similar role with GlaxoSmithKline, said: “The RBS Board fully accepts the conclusions of today’s resolutions.

“We strongly condemn the actions of those responsible and regret the control failings that allowed such misconduct to take place.

“This episode has exposed serious shortcomings at both individual and collective levels from which we continue to learn.

“As part of this effort we are committed to implementing further improvements to systems and controls.

“We are continuing thorough investigations into the conduct of employees in this part of the business.

“As a result, we have dismissed three people and suspended two more pending further investigation.

“This work is on-going and will take into account the findings contained in these settlements.”

Shares in RBS were up 1.95 per cent on news of the settlements and shares in Barlcays rose 3.27 per cent.